People are waking up to the fact that acquiring investment properties is a lucrative method to produce income. If you are one of them, you are most likely interested in securing an investment property loan.
Investment property loans can be quite different from traditional financing. They are frequently used to buy properties with the intention of generating revenue. This could be accomplished by acquiring rental properties or selling the asset when its value has increased.
If you have never applied for investment loans before, you may be unaware of how the transaction works. Although the procedure of getting loans for investment property is relatively simple, the choice of a financial service provider should be made carefully.
Here are some of the best investment property loans available on the market:
- Citibank
- Wells Fargo Bank
- Quicken Loans
- Lendio
- Veterans United Home Loans
- PennyMac Loan Services
- LendingHome
- Patch of Land
- Nationwide Home Loans Group, a Division of Magnolia Bank
- LendingOne
You have a wide array of options, which is why it is essential to conduct thorough research before committing to a certain provider. To help you make an informed decision, below is an overview of each investment loan firm.
1. Citibank
Citibank is a consumer subsidiary of Citigroup, which is one of the largest financial services companies today. It established consumer operations in Australia in 1985, when it was given the country’s first foreign banking license. Citibank offers credit cards, mortgages, personal loans, business loans, and credit lines.
Citibank provides potential investors with four lending alternatives for investment properties. There are four types of home loans: Basic Home Loan, Standard Offset Home Loan, Standard Variable Home Loan, and Standard Fixed Home Loan.
The interest rates on these accessible choices start at 2.21% per annum and go up from there to a yearly rate of 5.10%. A lot depends on your specific situation, such as whether you employ mortgage plus.
Pros with Citibank:
- Mortgage rates are flexible
- Lower fees than other lending institutions
Cons with Citibank:
- Imposes a home loan application fee
2. Wells Fargo Bank
Wells Fargo Bank is a diversified financial services corporation that offers banking, insurance, investments, loans, and consumer and commercial financing. It is one of the most trusted companies in finance and has been for almost 160 years.
Wells Fargo Bank offers a variety of lending options for each client. Their products and services include commercial banking, personal house loans, and investment banking with interest rates starting at 3.750%.
Pros with Wells Fargo Bank:
- Easily accessible
- Monthly fees are often waived
Cons with Wells Fargo Bank:
- Overdraft fees are charged
- Scandals in the past
3. Quicken Loans
Quicken Loans, now known as Rocket Mortgage, is a mortgage company that provides a comprehensive range of mortgage products. This covers traditional loans, refinancing, and home equity lending.
Quicken Loans provides consumers with a variety of financial choices. This can include FHA loans, adjustable-rate mortgages, VA loans, and jumbo loans. Their interest rates start at 4.875%.
Pros with Quicken Loans:
- Fast and easy income verification
- Live agents are available
- Custom fixed-rate loan terms
- Convenient online approval process
Cons with Quicken Loans:
- No home equity loans
- Lender fees can be costly.
4. Lendio
Lendio is the leading financing platform for small businesses. It features a varied pool of lenders, enabling business owners to apply for and manage funds. Lendio also assists you in determining the best sort of financing for your needs and links you with a suitable lender. Lendio offers commercial mortgage loans with interest rates ranging from 4.25% to 6%.
Pros with Lendio:
- Quick application process
- Personalized guidance
- Several funding alternatives are available
Cons with Lendio:
- Strict eligibility requirements
- Some loans have high-interest rates
5. Veterans United Home Loans
Veterans United Home Loans is a mortgage company that focuses on VA loans. It was established in 2002 with the intention of supporting military families in obtaining homeownership.
The organization has a reputation for offering excellent customer service and has served many veterans in utilizing their VA home loan benefits. Veterans United Home Loans provides purchase loans, IRRRLs, cash-out refinances, and energy-efficient mortgages with interest rates beginning at 4.875%.
Pros with Veterans United Home Loans:
- Focuses on all sorts of VA loans
- Provides 24/7 customer service
- No downpayment
Cons with Veterans United Home Loans:
- No home equity loans
- Charges VA Funding Fee
6. PennyMac Loan Services
PennyMac is a mortgage firm that concentrates on the development and service of mortgage loans, as well as the administration of mortgage-related assets in the United States. They have been in business since 2008 and place a priority on client satisfaction, excellence, and the ability to create a good impact.
PennyMac offers investment property loans for single-family homes, townhouses, condos, and multi-unit properties. They also provide conventional finance, FHA mortgages, jumbo loans, and VA loans. Their house loan rates vary depending on specific factors, but they typically begin at 4.250%.
Pros with PennyMac:
- Ensures on-time closings
- Convenient online application process
- Has a dedicated team
Cons with PennyMac:
- The origination costs are on the high side.
7. LendingHome
LendingHome, currently known as Kiavi, is a financing institution that assists real estate investors in scaling as well as funding their enterprises. It has been in operation since 2013 and has backed more than $7.8 billion in loans. LendingHome offers bridge or fix-and-flip loans with interest rates as low as 6.50%. They also provide rental loans with interest rates beginning at 5.750%.
Pros with LendingHome:
- Quick application
- A direct lender
- Transparent
Cons with LendingHome:
- Only accessible in some states
8. Patch of Land
Patch of Land, known today as Patch Lending, is a real estate crowdfunding platform. It began in 2013 as a small start-up with the simple objective of aiding in the building of wealth and the growth of communities. Patch Lending provides loans for fix-and-flip, ground-up construction, single-family bridge, multifamily bridge, and long-term rental. Their rates begin at 6.99% on average.
Pros with Patch Lending:
- A direct lender
- No income verification
- No prepayment penalty
Cons with Patch Lending:
- Charges application fee
9. Nationwide Home Loans Group, a Division of Magnolia Bank
Nationwide Home Loans Group is a subsidiary of Magnolia Bank, a local bank founded in Kentucky. The parent marketing division for all Nationwide Home Loans Group Websites is Build Buy Refi. Almost all 50 states are served by the company. Nationwide Home Loans Group provides financing on construction, manufactured home loans, and modular and mobile home loans. They also offer USDA rural and veterans home loans.
Pros with Nationwide Home Loans Group:
- No prepayment penalty
- Available in 50 states
- Almost 100% financing
- Staff is accessible seven days a week
Cons with Nationwide Home Loans Group:
- Interest rates on a combined loan can be higher
- A minimum credit score of 640 is required
- Construction and renovation loans are not available in Alaska, Hawaii, or New York
10. LendingOne
LendingOne is a private sector finance company for real estate professionals that aims to make the loan application faster and more efficient. They have simplified the application and prioritized the consumer experience.
LendingOne offers a variety of financing alternatives to meet the needs of every real estate investor. This covers rental loans, fix-and-flip loans, portfolio rental loans, multifamily bridge loans, new construction loans, fix-to-rent loans, and landlord mortgages.
Pros with LendingOne:
- Fast financing with pre-approval online
- Reasonable rates
- Available in 43 states
Cons with LendingOne:
- Collects origination and prepayment fees
What Investment Property Loan That Has the Fastest Approval Rate?
LendingOne boasts the fastest acceptance rate in the industry, with preapproval available online in minutes. They also provide up to 90% financing and cheaper rates than their competitors. LendingOne also prioritizes providing great customer service in order to expedite the whole process.
What Investment Property Loan That Has the Lowest Interest Rate Offered?
Wells Fargo Bank offers the lowest interest rates, starting at 3.750%. You can simply find a wide range of loans to meet the demands of your investment property. Wells Fargo Bank has been in business for quite some time and is one of the most well-renowned companies in the industry.
What Are the Other Ways To Raise Capital for Real Estate Investment Aside From Property Loan?
Property loans are the go-to option for any real estate investor. However, there are other ways to raise capital for real estate investment. You can obtain funds for your real estate investment through a self-directed IRA account. One thing to remember when utilizing a self-directed IRA account is that there are certain limits on the sort of property that may be acquired with this type of account.
You can also consult with hard moneylenders. Hard moneylenders are professional loan providers. They typically place a larger weight on collateral than credit ratings, making them a viable alternative if your credit score needs improvement.
Wholesaling is another alternative. The goal of wholesaling is to sell the property before the homeowner’s contract expires. You earn as the wholesaler by selling the property at a greater price than the seller first offered. Profits can subsequently be utilized to fund real estate transactions.